10
Futures
File: MFMaths3e_10.xls
FUTURES MARKET
The futures market differs from forwards or swaps in that forward contracts are highly standardised in terms of quantity, quality, delivery date and maturity. A future is simply a legally binding agreement between a buyer and seller to buy or sell a particular asset (e.g. a commodity or shares) or an index (e.g. FTSE 100) at some time in the future, at a price agreed today. Trading takes place in a futures exchange using contracts with known standard quantities and maturity dates. Without known items it would be impossible to assess value and liquidity ...
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